|9 Months Ended|
Dec. 31, 2022
|Retirement Benefits [Abstract]|
|PENSION PLANS||PENSION PLANS
The components of pension cost (income) for VF’s defined benefit plans were as follows:
The amounts reported in these disclosures have not been segregated between continuing and discontinued operations.
VF has reported the service cost component of net periodic pension cost (income) in operating income and the other components, which include interest cost, expected return on plan assets, settlement charges and amortization of deferred actuarial losses and prior service credits, in the other income (expense), net line item in the Consolidated Statements of Operations.
VF contributed $15.1 million to its defined benefit plans during the nine months ended December 2022, and intends to make approximately $6.2 million of contributions during the remainder of Fiscal 2023.
In the first quarter of Fiscal 2023, VF entered into an agreement with The Prudential Insurance Company of America (“Prudential”) to purchase an irrevocable group annuity contract relating to approximately $330 million of the U.S. qualified defined benefit pension plan obligations. The transaction closed on June 30, 2022 and was funded entirely by existing assets of the plan. Under the group annuity contract, Prudential assumed responsibility for benefit payments and annuity administration for approximately 17,700 retirees and beneficiaries. The transaction will not change the amount or timing of monthly retirement benefit payments. VF recorded a $91.8 million
settlement charge in the other income (expense), net line item in the Consolidated Statement of Operations during the nine months ended December 2022 to recognize the related deferred actuarial losses in accumulated other comprehensive income (“OCI”). Actuarial assumptions used in the interim valuation were reviewed and revised as appropriate. The discount rate used to determine the pension obligation as of June 2022 was 4.93%.
Additionally, VF recorded $0.7 million and $1.8 million in settlement charges in the other income (expense), net line item in the Consolidated Statements of Operations for the three andnine months ended December 2022, respectively, as well as $5.7 million and $6.7 million for the three and nine months ended December 2021, respectively. The settlement charges related to the recognition of deferred actuarial losses resulting from lump sum payments of retirement benefits in the supplemental defined benefit pension plan. Actuarial assumptions used in the interim valuations were reviewed and revised as appropriate. The discount rate used to determine the supplemental defined benefit pension obligation as of December 2022 and September 2022 was 5.58% and 5.71%, respectively.
The entire disclosure for retirement benefits.
Reference 1: http://www.xbrl.org/2003/role/exampleRef